SAN JOSE – Public documents listing possible foreclosure proceedings show that East Bay and South Bay loan defaults are mounting on a Bay Area developer who is the focus of a fraud investigation.
Developer Sanjeev Acharya and his company Silicon Sage Builders face a number of financial and legal complications, including federal fraud allegations, bankruptcy, and potential property foreclosures.
In a new challenge for Acharya, lenders have initiated foreclosure proceedings on multiple properties owned by affiliates he controls. The loan defaults were all filed in either Santa Clara County or Alameda County in January.
Among the properties controlled by Archarhya that have defaulted on their loans:
– 42021 Osgood Road in Fremont. An office building at this location has defaulted on a $ 8.3 million loan, according to records filed on Jan. 25.
– 1313 Franklin St. in Santa Clara. The retail portion of a mixed-use commercial and residential complex is in default of $ 7.9 million, according to a notice filed on Jan. 27. The retail fronts on Monroe Street between Benton Street and Franklin Street.
– 528 S. Mathilda Ave. in Sunnyvale. The property is in default on a $ 4.85 million loan.
– Properties on and near the corner of Fremont Boulevard and Peralta Boulevard, including 37358 Fremont Blvd. The properties are behind on $ 4.6 million in funding, according to a notice filed on Jan. 25.
– A commercial property on Alum Rock Ave. 1665 in east San Jose is in default of $ 1.8 million, according to a document filed Jan. 27.
The retail and office portion of Madison Park, a mixed-use complex at 1368 El Camino Real between Madison Street and Monroe Streets in Santa Clara, is behind on $ 3.5 million in funding, such as an am Notice filed January 11 shows.
The two properties in Santa Clara had been developed but had no retail tenants, although at least some of the apartments had been sold. The two properties in Fremont and the San Jose were not yet developed.
On January 23, Acharya applied for a cape. 11 bankruptcy proceedings to reorganize its finances.
In the bankruptcy case, Acharya said she had incurred at least $ 100 million and up to $ 500 million in debt, according to records filed with the US bankruptcy court.
The value of his fortune ranged from $ 1 million to $ 10 million, according to court records.
Acharya estimates that he owes money to between 200 and 1,000 creditors, according to court records.
All of these difficulties stem from a complaint filed by the Securities and Exchange Commission on December 21st alleging that Acharya and Silicon Sage Builders defrauded hundreds of investors on its development projects.
An estimated 250 people who paid approximately $ 119 million to invest in Acharya and Silicon Sage Builders real estate projects have the prospect of being defrauded over a financial network woven by the real estate developer, according to a complaint filed by the SEC.
The fraudulent activity, allegedly organized by Acharya and Silicon Sage Builders, began in August 2016, according to the SEC complaint filed in the U.S. District Court for Northern California.
“As of August 24, 2016, Silicon Sage Builders has raised approximately $ 119.2 million from approximately 250 investors through an ongoing series of misrepresentations, omissions and other misleading conduct,” the SEC alleged in its complaint.
Silicon Sage and Acharya painted an overly rosy picture of the prospects, prospects, and financial strength of the company’s various projects, according to the SEC.
“Since at least August 24, 2016, Silicon Sage Builders and all real estate development projects except one were no longer profitable,” says the SEC complaint.
The SEC case, bankruptcy proceedings, and string of mortgage defaults could create a financial tug-of-war of competing interests that could leave investors with an uncertain fate as they attempt to get back the money they placed with Acharya.
One funding campaign orchestrated by Acharya and described in the SEC case was the Bridge Fund, which was established in 2014 and whose purpose was to fund a range of construction activities for the Silicon Sage projects.
Silicon Sage’s Bridge Fund has raised tens of millions of dollars from investors over a period of years. The fund’s financial status, as documented in the SEC complaint, raises questions about whether investors will be repaid.
“As of October 2020, the Bridge Fund has US $ 19.58 in its bank account and owes the Bridge Fund investors around US $ 40 million,” the SEC filing shows.